Will rising mortgage rates in Redondo Beach stall a sellers market

by shundley on November 30, 2014

Rising mortgage rates can be a thorn in a blooming seller’s market. Mortgage rates rose a half a point nationwide in the past 30 days, a move that should be placed under consideration for homeowners looking to sell.

According to Bankrate.com’s national survey of large lenders a 30-year fixed-rate mortgage rose to 4.1 percent, compared with 3.99 percent last week. In South Redondo Beach 18 single-family homes were sold in May, at an average sales price of $1,191,861. The average cost per square foot for single family houses in May was $545 a square foot in the 90277 zip code. Standard sale equity homes were on the market for an average 25 days but in April homes were selling in 27 days at an average sales price of $1,015,282. The mortgage rate in March was hovering around 3.65 percent. Sam Xavier from the Real Estate office of Xavier and Xavier said Redondo Beach’s market is reacting as expected when mortgage rates start to swell.

As the rates creep up the equity in a home will decrease. Buyers may be priced out of the market. A half a point rise in mortgage rates could price out those who want to purchase a beach home and a single-family homebuyer may start looking at townhomes or condominiums.

Redondo Beach has a lack of inventory, and the market is being described as a stalemate. Xavier said sellers in his market are receiving multiple offers. “Many buyers are making offers over the asking price with no appraisal contingency,” said Xavier. Market reports show very few short sales and foreclosures in May. Almost all homes in South Redondo Beach sold last month were traditional sales.

It’s a seller’s market but realtors warn this window of opportunity could close if the rates continue on their current path.

In order to not feel rushed and avoid making hasty moves homeowners need to reflect on their motivation to sell said Xavier. People sell their homes for a myriad of reasons like a death in the family, a change in schools, downsizing, upsizing, to take advantage of the equity in the home. It doesn’t matter the reason for selling if it is prudent to the seller’s situation.

Baby boomers were hit the hardest in the mortgage crisis of 2008 and 2009. This summer’s pocket of opportunity is a great time to sell and make a profit for those who want to stock money away into a retirement plan or to buy land or property elsewhere. Baby Boomers really need to consider the timing of the market if they want a change in lifestyle.

For income property owners or sellers looking to upsize or move closer to their ideal community for school or work this summer is a golden opportunity to take advantage of the equity today’s current mortgage rates are creating. The current trend is the supply is low, demand is high but this can all change at a moment’s notice if mortgage rates continue to rise.